Both the Xbox Series X and the PS5 will feature some degree of backwards compatibility. But with the exception of some patents offering PS5 users hope of future expansion of its capabilities in this regard, all of the signs have pointed to Xbox Series X dominating in this category.
However, a now-deleted tweet from popular streamer Lance McDonald that was caught by ResetEra indicated that the PS5 be able to play any PS4 game, which would be a significant step up from Sony's previous claims (Tom's Guide).
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The full tweet from McDonald was: "There's been some confusion about this in the past and I can clear it up now: The PlayStation 5 can run all PlayStation 4 games without per-game whitelisting. Sony continue [sic] to test titles but the system will not prevent you from launching untested games."
The assumption is that McDonald or someone he knows has access to pre-release hardware and that was the basis for this claim. But even if that is the present situation, it doesn't necessarily mean that this will remain true when the console officially launches in November as there are certainly multiple software revisions to come between now and then.
If Sony determines that the gaming experience with some of those PS4 titles is too poor, it stands to reason that it will go with a software restricted list of games. Something that is compatible to avoid new console users having a terrible experience with older games.
While full support for PS4 titles would be a big step up for PS5 backwards compatibility, it would still fall well shy of the Xbox Series X backwards compatibility. According to the Jason Ronald, Director of Program Management for Xbox Series X, the console will "play all of these games from the past, but they should play better than ever before," and it will even "double the frame rate of a select set of titles from 30 fps to 60 fps or 60 fps to 120 fps."
Given all of the caveats, it is hard to call this a resounding success for PS5 fans. However, after the disappointing PS4 controller news and the overall weak backwards compatibility statements from the company, this is some of the best possible news PS5 fans with a big PS4 library have gotten to date.